Economic news

India to push G20 to raise share of taxes on firms where they earn ‘excess profit’ – sources

2023.07.18 08:18


© Reuters. FILE PHOTO: Workers work to install a hoarding board near the venue of G20 Finance Ministers and Central Bank Governors meeting at Gandhinagar in Gujarat, India July 13, 2023. REUTERS/Amit Dave/File Photo

(This July 16 story has been corrected to show that 25% is not the tax rate, but the share of corporate profit that would be taxed, in paragraphs 4 and 9)

By Shivangi Acharya, Sarita Chaganti Singh and Nikunj Ohri

NEW DELHI (Reuters) – India will push its Group of 20 partners at a meeting it is hosting to support its proposal to raise the share of taxes multinational companies pay to countries where they earn “excess profits”, government officials said.

India’s proposal, which has not been previously reported, could temper optimism among G20 members such as Australia and Japan that the meeting of finance ministers and central bankers in Gujarat would make progress on a long-awaited overhaul of global corporate taxation.

More than 140 countries were supposed to start implementing next year a 2021 deal overhauling decades-old rules on how governments tax multinationals. The present rules are widely considered outdated as digital giants like Apple (NASDAQ:) or Amazon (NASDAQ:) can book profits in low-tax countries.

The deal, pushed by the U.S., would levy a minimum 15% tax on large global firms, plus an additional tax on 25% of “excess profits”, as defined by the Organisation for Economic Cooperation and Development (OECD).

But several countries have concerns about the multilateral treaty underpinning a major element of the plan, and some analysts say the overhaul is at risk of collapse.

“India has made suggestions to get its due share of taxing rights on excess profits of multinational companies,” one official said. The suggestions have been made to the OECD and will be discussed “extensively” during the G20 meeting on Monday and Tuesday, the official said.

Three officials, who asked not to be named as discussions with the OECD were ongoing and the G20 meeting had not begun, said India wants significant increases in the tax paid in countries where the firms do business. They did not specify how much India is seeking.

India’s finance and external affairs ministries and the OECD did not respond to requests for comment.

Under the agreement, global corporations with annual revenues over 20 billion euros ($22 billion) are considered to be making excess profits if the profits exceed 10% annual growth. This 25% excess profit is to be divided among countries for them to levy tax.

India, fighting for a higher share of taxes for markets where firms do business, is the world’s most populous country and set to become one of the biggest consumer markets. Indian people’s average income is set to grow more than 13-fold to $27,000 by the end of 2047, according to a survey by the People’s Research on India’s Consumer Economy.

The G20 host nation will also propose that withholding taxation be de-linked from the excess profit tax principle. The rules now say countries offset their share of taxes with the withholding tax they collect.

Withholding tax is collected by companies while making payments to vendors and employees, and remitted to tax authorities.

The OECD in a document issued on Wednesday said a few jurisdictions have expressed concerns over allocating taxing rights among countries.

“Efforts to resolve these issues are underway with a view to prepare the Multilateral Convention for signature expeditiously,” it said.

($1 = 82.0490 Indian rupees)

($1 = 0.8907 euros)

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 98,051.27 4.18%
ethereum
Ethereum (ETH) $ 3,488.38 2.66%
tether
Tether (USDT) $ 0.999856 0.11%
xrp
XRP (XRP) $ 2.29 1.88%
bnb
BNB (BNB) $ 701.74 1.42%
solana
Solana (SOL) $ 198.13 3.63%
dogecoin
Dogecoin (DOGE) $ 0.331757 3.30%
usd-coin
USDC (USDC) $ 1.00 0.02%
staked-ether
Lido Staked Ether (STETH) $ 3,486.40 2.83%
cardano
Cardano (ADA) $ 0.916537 2.04%
tron
TRON (TRX) $ 0.256404 2.11%
avalanche-2
Avalanche (AVAX) $ 40.92 6.28%
chainlink
Chainlink (LINK) $ 24.78 3.76%
the-open-network
Toncoin (TON) $ 5.85 4.51%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,150.48 2.87%
shiba-inu
Shiba Inu (SHIB) $ 0.000023 3.66%
sui
Sui (SUI) $ 4.54 1.59%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,624.16 3.94%
hedera-hashgraph
Hedera (HBAR) $ 0.30723 2.80%
stellar
Stellar (XLM) $ 0.385928 4.40%
polkadot
Polkadot (DOT) $ 7.40 2.46%
weth
WETH (WETH) $ 3,485.24 2.48%
hyperliquid
Hyperliquid (HYPE) $ 29.18 0.23%
bitcoin-cash
Bitcoin Cash (BCH) $ 463.26 1.47%
leo-token
LEO Token (LEO) $ 9.50 0.92%
uniswap
Uniswap (UNI) $ 14.15 1.99%
litecoin
Litecoin (LTC) $ 107.73 1.63%
pepe
Pepe (PEPE) $ 0.000019 3.65%
bitget-token
Bitget Token (BGB) $ 5.37 17.29%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,682.94 2.60%
near
NEAR Protocol (NEAR) $ 5.49 1.32%
ethena-usde
Ethena USDe (USDE) $ 0.999687 0.06%
aave
Aave (AAVE) $ 381.20 1.29%
internet-computer
Internet Computer (ICP) $ 11.26 5.27%
usds
USDS (USDS) $ 1.00 0.02%
aptos
Aptos (APT) $ 9.63 2.32%
crypto-com-chain
Cronos (CRO) $ 0.159904 0.30%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.517302 2.72%
mantle
Mantle (MNT) $ 1.26 5.66%
vechain
VeChain (VET) $ 0.051982 8.44%
ethereum-classic
Ethereum Classic (ETC) $ 27.48 1.58%
render-token
Render (RENDER) $ 7.67 0.35%
bittensor
Bittensor (TAO) $ 499.94 1.36%
monero
Monero (XMR) $ 197.39 4.76%
whitebit
WhiteBIT Coin (WBT) $ 24.91 2.02%
mantra-dao
MANTRA (OM) $ 3.72 0.60%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.36 0.94%
dai
Dai (DAI) $ 1.00 0.15%
arbitrum
Arbitrum (ARB) $ 0.800535 0.68%
filecoin
Filecoin (FIL) $ 5.33 3.41%